GlobalFoundries before Malta planning board next week

GlobalFoundries is seeking approval from the Malta Planning Board for a three-story building that would include a 90,000 square-foot clean room and, according to the meeting agenda “approximately 108,000 square feet of clean space to support technology development and manufacturing activities.” As of late September, GlobalFoundries had not said how it would pay for the new building or how much it would cost.

The Planning Board is expected to discuss the project at its next meeting, Tuesday.

You mention in your blog the financing of this new expansion for Global. Like all other construction at this site the question becomes how much public assistance will other taxpayers need to supply to cover the economic inadequacy of this operation. I would propose a different route for strengthening the private sector in our region and would welcome any comments.
What if public assistance for all future tech valley projects is reallocated and used for the purchase of health insurance for all private sector workers in our region?
This would build on our strength – profitable companies that are here already: strengthening them, promoting hiring and aiding expansion in whatever venture they are engaged in. It would also maintain government’s proper role as the moral arm of the economy. If the $5 – $6 billion dollars that has already been spent on tech valley had been spent in such a fashion, local businesses would have been supplied with 400,000 – 600,000 family health insurance policies.

@TB: Interesting idea, but your numbers are a bit off. Assuming you want to provide the workers health care for life, not just for a year, the number you could cover with $5-6 billion would be around 4000 family policies. Still, that would have covered the number of jobs added by Global Foundries and Albany Nanotech if that amount of money is correct. Global Foundries got $1.3 billion in cash and tax breaks, which wouldn’t cover health care for the number of jobs they created. The other point you’re missing is that once you create the momentum, companies need smaller and smaller incentive packages to locate here. The incentive becomes proximity and access to a workforce with the necessary skills and all of the support businesses.

Roy – Thank you for responding to my comment so civilly.
I would like to comment first on the momentum concept you speak of. The reliance on this future momentum theory is what makes local companies that are already here such a better choice for public investment. They are already here and are already profitable, we’re not looking to the future in some hope that they will someday be able to get off public assistance. Far better to enhance the expansion of profitable outfits.
Is there a point at which we cut off public assistance to tech companies because the momentum is there and they don’t need assistance or because this momentum is not occurring.
Secondly, the numbers. As a supporter of tech valley do you know how much the policy you are promoting is costing the public? I’m estimating the figures from just reading the papers and would gladly defer to any official study that you may have available. My estimate is about 6 billion. Best case scenario, a regional health insurance program similar to the healthy NY program could bargain annual premiums down to $10,000 per family policy. The numbers then become:
$6,000,000,000/$10,000 = 600,000 policies.
If this is spread over 7 years (the useful life of a chip plant), the reallocated tech valley money could have supplied a total of 85,000 health insurance policies per year not adjusted for inflation.
I really like your point concerning a lifetime supply of policies though I can’t imagine where you got the 4000 policy number.

Ah, where to begin….. #4 (TB), Where on Earth do you get the statistic of 7 years as the “useful life of a chip plant?” That is absolutely false. Believe it or not, GF has invested more money into their manufacturing project than the taxpayers of NY, and no, they absolutely do not expect their investment to run dry in 7 years. That’s laughable. I suppose the demand for leading-edge technology microchips will run out in 7 years? Chipmaking is suddenly an “economically inadequate” venture? Get real. Demand is higher than ever for latest-and-future technology chipsets, which are exactly what are developed and produced at the Malta sight. Demand is so high that GF’s foundry competitors are largely unable to accomodate new orders, driving customers straight to the Malta site for their manufacturing needs. GF is now the 2nd largest foundry company (by revenue) in the world, and are showing every intention of growing and expanding their customer base and product offering right here in NY… and you find it prudent to pull the plug and start over in favor of a publically-funded health insurance welfare program? Not going to happen.

Also, for what it is worth, GF has shown no intention to ask for any further state incentives- incentives that would have been required to break ground on a project of their scope anywhere in the U.S- as this additional cleanroom (the one this blog is referring to) and various other planned upgrades were already bundled into the original deal before any ground was broken in the first place.

Z
If the tech valley companies didn’t require public assistance to locate here I would be celebrating their expansion with you. It is their need for public assistance that defines them as economically inadequate. Should we have a ‘publicly funded welfare program’ for just tech companies or should the public funding be in a broad based assistance program that reaches all private sector companies in the area, while maintaining government’s proper role as the moral arm of the economy? This is the question I’m raising.
As to this GF project: How do you know that this latest project will not require further welfare payments? They could ask for money at any time. If they do are you willing to step back and wonder if there is a better economic use of the public funds?

I really like the idea of using this money to invest in companies that are already here. The country is littered with empty buildings, brownfield sites, etc. of companies that either folded or moved when they got a better offer after states gave them millions of dollars in public assistance. Companies that are already here have already made an investment, pay taxes, and are less likely to pick up and move because they have already chosen to be here without the subsidy. These are the folks that are here for the long haul and are a less risky investment for our tax money.

I’m not sure if health insurance is the way to go, although I could easily be persuaded for many reasons, but I like the direction your mind is going.